Problems facing rice producers

More than a billion people - predominantly small farmers in developing countries - make their living, mainly or even exclusively, from rice production.

Rice is the most widely consumed food in the world; 397 million metric tonnes are produced and consumed every year. Since the 1960s rice production has increased steadily. Many developing countries - such as India - that were once facing shortages are now able to meet their own needs and even export excess stocks. More than a billion people - predominantly small farmers in developing countries - make their living, mainly or even exclusively, from rice production.

To ensure adequate domestic supplies, export firms in most countries have been subject to legal restrictions. However, hunger remains a problem in many rice producing countries - even those that produce significantly more than needed to meet domestic demand.

Small farmers are often forced to sell, not only their surplus, but also the bulk of their harvest at prices below their production costs. Only in the rarest cases do they possess the means to store freshly harvested paddy rice until they can secure the best price.

Subsidised rice dumped onto international markets

In addition, in many regions it is becoming increasingly difficult, if not completely impossible, to sell domestic rice at sustainable prices. Due to trade liberalisation policies subsidised rice, from highly efficient producer countries such as the US and Japan, is dumped in foreign markets at prices below production costs.

Rice from highly efficient producer countries such as the US and Japan, is dumped in foreign markets at prices below production costs.

Also the price for 'improved' seeds and the associated agricultural chemicals are steadily increasing. To buy these farmers often have to take out loans and, once in debt, very few ever manage to free themselves from the vicious circle of indebtedness. Ultimately, they are often forced to sell what little land they own.

Benefits of Fairtrade for producers

Fairtrade International took the first steps towards the introduction of Fairtrade Standards for rice production in 2000. The aim was to open up new markets for the benefit of small farmers. Since the introduction of the Standards farmers who sell rice on Fairtrade terms receive a price that covers their costs of sustainable production. They also get a Fairtrade Premium to invest in social, economic and environmental projects in their communities.

Fairtrade Standards for rice

Fairtrade Standards for rice ensure that:

Producers are small family farms organized in cooperatives (or associations) which they own and govern democratically.

Pre-harvest lines of credit are given to the cooperatives if requested, of up to 50% of the purchase price.

A Fairtrade Premium is paid on top of the purchase price. This is used by cooperatives for social and economic investments such as education, health services, processing equipment, and loans to members.